Bonding Curve
A deterministic pricing function used by Pump.fun and similar launchpads where token price rises smoothly as buyers acquire tokens from the curve. Once the curve's market-cap threshold is met, the token 'graduates' and migrates to a regular AMM like Raydium.
In detail
A bonding curve is a smart-contract primitive that sets token price as a pure function of supply — more buys raise price predictably along the curve. Pump.fun popularized the pattern on Solana: each new memecoin launches on a bonding curve, accumulates volume, and at ~$69k market cap graduates by depositing liquidity into a Raydium pool. For traders, bonding curves mean very fast price action (no AMM liquidity to absorb size) and clear early-buyer advantage, but also concentrated rug risk since curves can be paused or drained by token creators.
Key points
- Deterministic price = f(supply) pricing
- Pump.fun popularized on Solana
- Graduation threshold ~ $69k MCap, migrates to Raydium
- Fast price action, early-buyer advantage
- Rug-pull vector: most honeypots live on curve